WASHINGTON—Consumer credit rose 7.6% in May – the fastest pace in six months.
NAFCU Chief Economist and Vice President of Research Curt Long attributed the growth to revolving credit, "which accelerated sharply after several disappointing months."
Revolving credit, which is primarily credit cards, increased 11.4% in May, while non-revolving credit, which is mostly motor vehicle and education loans, rose 6.2% during the month.
"Consumer spending was underwhelming during the first quarter, but has since picked up momentum in the second quarter," said Long in a NAFCU Macro Data Flash report. "Non-revolving credit growth also accelerated despite a slight slowdown in vehicle sales."
Total consumer credit saw a monthly increase of 3.2% in April and 2.7% in March (all seasonally adjusted annual rates). From a year ago, total consumer credit was up 4.8%.
Total consumer credit for credit unions increased 1.8% in May from the previous month, compared to a 1.1% increase for banks and 0.2% increase for financial companies. In the first quarter, total consumer credit at credit unions rose 0.9%, while banks and financial companies decreased 2.6% and 2%, respectively, said Long.
"Credit unions' portfolio of consumer credit was up 8.3% from last year," Long said. "Credit unions now own 11.3% of the market, which is up from 10.9% a year ago."
From a year ago, banks' market share edged up from 41% to 41.4% and financial companies' share fell from 14.6% to 13.8%.